The Addis Agenda acknowledges that development finance can contribute to reducing vulnerabilities and enable countries to prevent or combat situations of crisis related to conflict or natural disasters.
Financing requirements for inter-agency humanitarian appeals and refugee response plans coordinated by the United Nations have risen significantly over the last decade, from USD 5.2 billion in 2006 to USD 22.1 billion in 2016. While funding also increased over the same period, from USD 3.4 to USD 12.6 billion (as of 30 December 2016), it increasingly falls short of needs.
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Overall global funding, which includes all public and private international humanitarian aid, reached USD 28 billion in 2015 - this includes the funding of USD 10.7 billion allocated to Humanitarian Response Plans (see World Humanitarian Data and Trends 2016).
The first World Humanitarian Summit in Istanbul, Turkey in May 2016, emphasized the need to “invest in humanity” by not only ensuring that humanitarian appeals were better funded, but also by diversifying the range of financing tools used in areas of protracted and recurrent crises to mitigate impact and reduce needs overall (see also ‘Coherence of development and humanitarian financing’). Commitments were made to increase resources for humanitarian action, including by increasing the Central Emergency Response Fund to $1 billion. Later in 2016, General Assembly resolution A/RES/71/128 called upon all Member States, and invites the private sector and all concerned individuals and institutions, to consider increasing their voluntary contributions to the Central Emergency Response Fund in order to achieve an annual funding level of USD 1 billion by 2018. In addition, as of June 2016, 18 donor agencies and 19 international agencies had adopted a “Grand Bargain” launched at the Summit containing 51 recommendations to make humanitarian operations more efficient, transparent, and accountable. The World Humanitarian Summit has also called for an increase in the proportion of financing that goes directly to local and national actors and institutions focused on humanitarian prevention and response, including through the use of country-based pooled funds and other mechanisms.
Expenditures on humanitarian activities represent an increasing proportion of overall expenditures by the UN development system. Over the last decade, UN expenditures on humanitarian assistance activities increased by some 123 per cent in nominal terms. Expenditure on development activities also grew, but at a slower pace, with the share of humanitarian expenditure rising from 31 per cent of the total in 2005 to 40 per cent in 2015.
The Addis Agenda recognizes the importance of coherence of development and humanitarian finance. Discussions held at the World Humanitarian Summit also underlined the need for greater coherence between humanitarian and development programming – to be supported concurrently by aligned humanitarian and development financing.
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The Agenda for Humanity prescribed by the Secretary-General calls for a New Way of Working that includes three fundamental shifts:
- Working towards collective outcomes that transcend humanitarian-development divides.
- Working collaboratively based on comparative advantage of diverse actors (as relevant to the context, not merely institutional mandates).
- Working over multi-year timeframes, recognizing the reality of protracted crises and aiming to contribute to longer-term development gains, in the logic of the SDGs.
These same shifts have implications for the way programming is financed – particularly in fragile states. Collective outcomes would allow both humanitarian and development actors to focus around medium term goals that contribute to the SDGs. This includes shifting programming, especially in countries in protracted crises, to promote preparedness, reduce risk, reduce vulnerabilities and develop local capacities to respond – areas that require a more sophisticated blended mix of both humanitarian and development sources.
To that end, the Secretary-General’s Report for the World Humanitarian Summit called for financing that would support collective outcomes, calling on relevant actors to “ensure predictable and adequate resourcing of collective outcomes in protracted and fragile situations and meet the need to provide a full range of financing options to a more diverse set of actors.” The Summit called for a new platform or finance instruments that would move beyond traditional grants, including concessional financing, loan guarantees, risk insurance catastrophic bonds, technical assistance and other relevant instruments.
Greater collaboration between the UN and international financial institutions including the World Bank, for example through the Global and MENA Concessional Financing Facilities demonstrate a marked departure from previous siloed approaches. IDA 18, which envisages a number of new instruments aimed at addressing crises in fragile states, will also contribute to this new paradigm shift.
In line with the Resolutions of the General Assembly and Security Council on Sustaining Peace, the Peacebuilding Fund has continued to invest to prevent violent conflict, encourage resolution or further escalation during conflict as well as help societies recover and rebuild following conflict. The Fund allocated USD 52 million in 2015 and may allocate up to USD 60 million in 2016 supporting 128 projects in 30 countries.
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The September 2016 Pledging Conference in the margins of the High Level Segment of the UNGA raised USD 152 million in pledges which will be deposited over the next 4 years. However, the amounts mobilized through these voluntary contributions do not constitute adequate and predictable funding as called for by the Addis Ababa Action Agenda and the Resolutions of the General Assembly and Security Council. The Fund had set a target of $100 million a year over three years, to achieve a minimum threshold of predictable financing and maintain its current level of operations.
In addition to increasing the quantity of financing to sustain peace, there is a need to encourage more pooling of funding and closer strategic operational partnerships among United Nations entities, international financial institutions and other regional and sub-regional financial institutions to better share the risks and optimize the peacebuilding impacts.